WRONG. If Im stupid enough to sell it in a weak market I would possibly get $600k-60k= $540,000 gain minus costs. Now you can get a $250k or $500k tax exemption if you have lived there 2 years in the last 5 years. That means I can pocket $500,000 tax free cash ! Where else can you do that? Not even the stock market. Here they tax you with capital gains and ordinary incomes and all of that. BTW your analogy on Toyota is an extremely poor one. Car is a depreciating asset unlike real estate.
Taxes aren't the most important issue. It's buying power of your money. It increased a bit, not not enough to puff your chest out.
You sound like you have been successful with over $100M in profits for a fund from your previous thread. I'm wondering why it is as important in your situation. Are you renting now and/or looking to buy a multi-million dollar estate or something? ie. Even Barry Ritholtz of the Big Picture sold his previous home and bought another home last year knowing how bad the housing market was going to be. His thinking I believe was that he will always be owning a primary residence so whether the housing market declines during ownership of his prior residence or new residence doesn't matter. I could understand if one is just out of college and looking to buy a condo, but I'm wondering what the thinking is in your situation.
My 4 years in Denver, Parker specific, has led me to believe RE isn't a good investment in Denver, unless you are in Cherry Creek or Wash Park. Too much supply in burbs when I moved here 4 years ago and still I believe twice the national avg and they keep builing Denver appreciation is 1-2% a year on avg even in a non-depressed market, unless you are in a hot area of town. I figure if I sold after commissions I would be ahead by maybe 10k, that's it. And I low balled on this house, it had been on market 280 days. On the plus side I don't believe are market is going to tank either, at least not like So Cal, So Florida, AZ or NV. I read in a few mags that we will be flat at 0% which seems about right. I don't think Parker is going to slump really, when it was just confirmed Costco is building here, and Best Buy just did. Both of these retailers do a lot of research before throwing up a shingle.
For the same reason no trader likes to make a stupid move and lose money, I'd rather not buy the top of the market and lose on the decline. I'd rather wait for local RE to take a hit and buy something when it has corrected. And it's not like I live in Dog Patch... houses in my neighborhood run $500-$600/sq ft. Just because I can "afford" to waste some money, doesn't mean I'd be sanguine about it.
Why not just bottom hunt at one of the auctions? You probably want a very specific neighborhood right?
It's more akin to if you already own a home now, then it's like selling one stock to buy another. There are transaction costs, etc, but overall if you do that the market direction doesn't seem to be as important as someone buying their first condo was my point.
Even that play would be premature, I think. We might see RE values decline 30% or more... Sure Gummint would try to stop it short of that, but maybe they can't.
"You are not pragmatic. You don't have a roof of your own. You donot have shelter from Fed and state taxes, you have nothing to show, excpet those clothes on your back and a car that you drive" I disagree he clearly is very successful. He drives an expensive car and has no house. This is a good b/ you can sleep in your car but you cant drive your house!!